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Finance & Banking vocabulary · Treasury & Markets

Duration

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, duration means: A measure of the timing or interest-rate sensitivity of a fixed-income instrument's cash flows.

In Turkish: süre, durasyon

How it is used

Specify the type: Macaulay duration measures weighted timing; modified duration approximates price sensitivity.

Example sentences

  1. The portfolio's modified duration increased after the manager bought longer-dated bonds.

    The portfolio became more sensitive to a small yield change.

  2. The analyst compared duration with maturity when reviewing the coupon bond.

    Cash received before maturity changes the weighted timing measure.

Common collocations

  • modified duration
  • Macaulay duration
  • bondA debt security that a government or company sells to investors to borrow money. It pays regular interest, called a coupon, and returns the full amount at maturity.
  • yieldThe income an investment earns, shown as a percentage of its price or value. For a bond, it is the return an investor gets by buying at the current price.

More terms: Treasury & Markets

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This page explains English vocabulary for learners. It is not financial advice.